KC Council committee backs plan for $46 million hotel in the Crossroads

The first new large hotel proposed in downtown in a generation won strong backing Wednesday from a Kansas City Council committee and is expected to be approved by the full council next week.

Chartwell Hospitality plans to break ground in March on a $46 million hotel and garage that will occupy much of the block northeast of 16th Street and Baltimore Avenue. The 10-story building will jointly house a 104-room Residence Inn and a 153-room Courtyard Marriott.

Besides being the first big hotel to be built downtown since the Vista International opened in 1985, the Chartwell project is breaking what has become standard procedure for urban redevelopment projects in Kansas City by not seeking any tax incentives from City Hall.

As a result, the project is expected to yield $2.5 million in local tax revenue annually. It’s also expected to create up to 150 construction jobs and 100 long-term hotel jobs.

“You’ve given us something fun to vote on the last meeting before Christmas,” said Councilman Ed Ford, chairman of the Planning, Zoning & Economic Development Committee.

The only objection to the hotel, which would open in late 2015, was by its neighbor to the north, Sporting Innovations, which occupies the newly renovated historic Hanna Rubber Co. building at 1511 Baltimore. The firm objected that the Chartwell hotel project will be separated from its six-story building by eight feet.

But council members dismissed that objection, noting that zoning in the downtown area allows and encourages buildings to be erected close to each other.

“To believe you’ll have nothing adjacent in downtown is wishful thinking,” said Councilman Scott Wagner. “It’s a good project. There’s no other way to put it.”

Whitney Kerr Sr., a broker for Cassidy Turley who handled both the Sporting Innovations and the Chartwell real estate transactions, said Sporting officials turned down an opportunity earlier this year to buy land for a buffer on its south side.

Kerr said zoning allows buildings to be situated “cheek to jowl” downtown. He added that Sporting Innovations officials also had other opportunities to work with Chartwell.

“Either they were too busy or didn’t recognize it might be beneficial” to buy the buffer property, Kerr said.

Sporting Innovations officials could not be reached for comment, but a letter submitted to the council from the firm’s representative, attorney F. Chase Simmons, said the firm learned only Tuesday that the project’s final design was scheduled to be reviewed Wednesday by the council committee.

“Fairness dictates they should have more than one day to react,” a representative said.

So although council committee members rejected the request to postpone their recommendation, they decided to delay the final council consideration until next week.

It is expected to be approved easily.

Chartwell Hospitality is based in Nashville, Tenn., and has a portfolio of 32 hotels and five under construction.

The company’s top executives are Rob Schaedle and his son Will Schaedle.

The project will require significant demolition and structured parking, reasons often cited by developers for needing tax incentives to make projects financially viable. But Will Schaedle said Chartwell believes it can do the deal entirely private.

“With our brands and location, and expected occupancy and rate, we think the project will be self-sustaining and don’t need public assistance to make it work,” he said.

Rob Schaedle said the firm’s first interest in Kansas City was in 2009 when it considered redeveloping the old 21-story Federal Reserve Bank of Kansas City building at 925 Grand Blvd. Though it admired the historic structure, the firm decided to pass on converting it into a hotel.

“But we liked the market,” Schaedle noted and in August of this year bought the property of its new project for $4.5 million.

The development is oriented to have the hotel and its lobby facing Baltimore and its 166-space garage along Main Street. The garage will be on the route of the new streetcar, and developers agreed to a request by the City Plan Commission to alter the garage design to include a 5,300-square-foot retail space at 16th and Main.

The Marriott Courtyard will be on the north side of the project, the Residence Inn on the south. The hotel tower will be set back 40 feet from the first floor level, creating space for a rooftop swimming pool and entertainment area.

The developers also will install a brick facade on both the hotel and the garage to improve the appearance. They agreed to a request by the Crossroads Community Association to incorporate more contemporary features in the design.

The designer is Bounds and Gillespie Architects of Memphis, Tenn.

Financing is being provided by SunTrust Bank of Atlanta.